RBI rejects SBI-Societe Generale joint venture proposal
11 Aug 2008
Mumbai: The Reserve Bank is reported to have rejected a plan by French bank Societe Generale SA and the State Bank of India to jointly offer securities services in the country.
The RBI, reports said, refused to approve the proposal because of concerns about unauthorised trading in Europe that cost Societe Generale $7 billion earlier this year.
Also, the Zurich exchange had imposed a fine on Societe Generale for failing to keep proper records of the activities of some of its traders and misusing trader identification numbers.
Under the proposal, agreed to by State Bank and Societe Generale in June, SBI was to hold 65 per cent in the joint venture that would offer custodial and administration services of funds for investors.
Societe Generale was to provide Rs28 crore and State Bank Rs52 crore for the joint venture.
Societe Generale's proposal is also pending with the Foreign Investment promotion Board (FIPB).
The joint venture would have made the SBI the first public sector bank in the country to enter custodial services where foreign banks like HSBC, Deutsche Bank and Citigroup are the major operators.
